The Topps Co. last month renewed for one more season its right to use NFL marks on the company's football trading cards, and renewed three league sponsorships as part of the package.
Topps guaranteed the league $1 million in royalty revenue, plus promised it would spend $250,000 to promote NFL trading cards, according to the license. A copy of the license was attached to Topps' quarterly earnings report, which the company filed with the Securities and Exchange Commission last week.
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| Topps pays $1M to use league, team marks |
Because the NFL has three other trading card licensees and the league said the contracts are similar, that would mean it receives at a minimum $4 million annually in royalty revenue from trading cards.
The license does not give Topps rights to players; those deals are worked out with the players association. Instead, the NFL license grants Topps the right to use various league and all team trademarks on its cards.
Topps will continue to sponsor the NFL Hall of Fame and title-sponsor both the Pro Bowl Experience and the Super Bowl's card show, according to the license contract.
The NFL will receive 9 percent of Topps' football card net sales of between $1 million and $11 million; then 8 percent of net sales between $11 million and $16 million; and 9 percent of net sales above $16 million, the contract said.
The sports trading card business has been weak. According to Topps' quarterly report, sales of traditional sports card products decreased a little more than 30 percent in the first quarter of fiscal 2004, ended May 31. The company did not return calls seeking comment.
Pete Quaglierini, the NFL's manager of trading cards and memorabilia, said he hoped the inclusion of four quarterbacks in the first round of the draft would drive sales.
"The market has been down the last few years for a host of reasons," he said, including competition from games like Pokemon. But he said the NFL, in tandem with its licensees, planned promotional outreaches to kids through places like hobby shops and at NFL Experience expositions.
The other three trading card licensees are Donruss, Fleer and Upper Deck.
